As people begin to travel in greater numbers amid the ongoing COVID-19 pandemic, new restrictions and requirements to travel are…
Sun Country Airlines Sold to Investment Giant Apollo Global Management
On Thursday, Minneapolis-based Sun Country Airlines announced that it had been acquired by Apollo Global Management, a major investment group based in New York City. The deal, subject to regulatory approval, is expected to be completed by the first quarter of 2018. Sun Country is currently privately owned by brothers Marty and Mitch Davis, also the owners of Minnesota countertop company Cambria.
Before the acquisition, Sun Country was the largest privately-held fully-independent airline in the United States. Following the acquisition, the airline will continue to have its headquarters in Eagan, Minnesota, where they are currently based. Jude Bricker, the current Chief Executive Officer who was appointed in July, will remain in the same position following the changes.
Since Bricker’s appointment, the airline has moved more towards an ultra-low-cost carrier as a way to increase revenue, a change some major U.S. airlines are attempting. Some changes that were brought to the airline include increasing capacity on their Boeing 737-800 fleet and charging for carry-on bags that have to be placed in overhead bins. These changes follow the trends set by other ultra-low-cost carriers such as Spirit Airlines.
In a press release from the airline, Chairman Marty Davis said, “We are particularly pleased to sell Sun Country to Apollo because it has a proven track record for successfully helping companies gown and generate long-term value.”
Although no exact details of the deal have been released, there have been similar acquisitions in the U.S. low-cost carrier market in the past few year. In 2013, Frontier Airlines was purchased by Indigo Partners, who have helped to turn the airline on the right path.
While Sun Country has been operating profitably over the past few years, their numbers are declining quickly and the airline is nowhere near the top of the list of profitable airlines in the United States. Reported operating income for the airline was 16 million U.S. dollars in 2016, down 41 percent from their reported income in 2015.
The airline currently operates 26 aircraft, a mix of Boeing 737-700 and Boeing 737-800, to over 35 destinations, many of which are seasonal and located in tropical climates. The airline operates out of their main hub in Minneapolis while featuring focus cities at Dallas-Fort Worth International and Southwest Florida Regional Airport in Fort Myers.
More recently, Sun Country has been operating charter flights to popular casino destinations to supplement its scheduled commercial service. Destinations such as Biloxi, Miss. are the frequent recipient of Sun Country charters ferrying high rollers to casinos across the country. Sun Country also has an agreement with European airline Transavia in which aircraft are wet-leased to each other based on demand, as both use the Boeing 737.
Some have described Sun Country as a “mom-and-pop” airline due to its small fleet size and unique amenities. In the past, the airline would sell inexpensive first class upgrades when checking-in, giving passengers an opportunity to enjoy luxury for less, as well as rent out personal entertainment devices to passengers. Famously, Sun Country sells cheeseburgers featuring Minnesota-raised beef from Eden Prarie on-board for $5.
The acquisition marks the first airline acquisition for Apollo. However, it is not their first foray into the travel and leisure markets. In the past, the group has had stakes in companies such as Diamond Resorts, Great Wolf Lodge, and Norwegian Cruise Lines.
- Delta Air Lines Announces Fourth-Quarter Financial Results - January 15, 2021
- Allegiant Announces 21 New Routes, Three New Cities - January 13, 2021
- The U.S. Carriers Growing During the COVID-19 Pandemic - January 6, 2021
With the resumption of 11 routes in domestic markets across Brazil, Chile, Colombia and Peru, LATAM Airlines Group reported that…
Qatar Airways announced that it is likely to only bring back half of the A380s it has on its fleet…